Telephone and Data Systems (TDS) Q3 2024 earnings summary

Executive summary

• Progressed on the sale of UScellular's wireless operations and select spectrum to T-Mobile for $4.4 billion, targeting a mid-2025 close, and filed a public interest statement with the FCC.

• Announced and entered agreements to sell select spectrum assets for $1 billion to Verizon and additional sales to other operators, with further monetization efforts ongoing.

• Closed the sale of OneNeck IT Solutions, generating free cash flow and strengthening the balance sheet; also divested non-strategic ILEC and cable assets.

• TDS continues to invest in fiber deployment and 5G network enhancements, while maintaining strong cash and liquidity positions.

• Announced leadership transition at TDS Telecom, with Chris Bothfeld succeeding Michelle Brukwicki as CFO.

Financial highlights

• Q3 2024 consolidated operating revenues declined 4% year-over-year to $1.22 billion; UScellular revenues fell 4% and TDS Telecom grew 2%.

• Adjusted EBITDA rose 6% year-over-year to $349 million for Q3, reflecting cost optimization and lower operating expenses.

• Free cash flow for the nine months was $246 million, up from $(12) million in the prior year period.

• TDS Telecom reported a 2% increase in total operating revenue and a 21% increase in adjusted EBITDA for the quarter.

• Net loss attributable to TDS common shareholders was $83 million for Q3, driven by a $136 million spectrum impairment charge.

Outlook and guidance

• Raised full-year 2024 profitability guidance for adjusted OIBDA to $800–$875 million and adjusted EBITDA to $970–$1,045 million; capital expenditures expected at $550–$600 million for UScellular.

• TDS Telecom 2024 guidance: adjusted EBITDA $330–$360 million, revenues $1,050–$1,080 million, capex $310–$340 million.

• TDS expects to finance capex primarily through operating cash flow, cash balances, and available debt facilities.